Government approves natural gas export policy

Amid tension, opposing MKs vow to bring issue to High Court; PM: Gas must not stay in ground under layers of bureaucracy.

June 23, 2013 18:59
Tamar natural gas rig.

Tamar natural gas rig 370. (photo credit: Albatross)

Amid a public uproar, the cabinet approved plans to keep 540 billion cubic meters of natural gas at home – thereby limiting export quantities to 40 percent of the country’s current reserves, rather than the original 53% cap suggested.

“The State of Israel has received a gift from nature – gas in vast quantities,” said Prime Minister Binyamin Netanyahu. “Thanks to the decision we made today, every Israeli citizen will enjoy this gift. We will lower the cost of living in the electricity sector via the gas that will flow into the Israeli economy, and we will invest in the public welfare thanks to the profits that will go into the state coffers from gas exports.

“Any delay in implementing this decision will endanger the state’s ability to realize the benefits of our gas resources,” he continued. “Gas must not stay in the ground under layers of bureaucracy and populism.”

Netanyahu submitted the proposal for the cabinet’s review together with Energy and Water Minister Silvan Shalom, Finance Minister Yair Lapid and outgoing Bank of Israel Gov. Stanley Fischer.

Data submitted at the meeting stated that in 2012, the Israeli market consumed seven billion cubic meters of gas; thus, even in keeping with forecasts of a significant increase in gas consumption, the quantity will suffice for at least 25 years.

While gas developers in the eastern Mediterranean area have been urging the government to advance an export policy in order to provide stability and certainty in the region, environmentalists have been advocating keeping as much gas as possible at home for a variety of uses.

Following a year of discussions, the Zemach Committee – an interministerial committee led by Energy and Water Ministry director- general Shaul Zemach – recommended in August 2012 that the country keep 450 billion cubic meters of gas at home and cap exports at 500 billion cubic meters.

“We held serious, in-depth, significant discussions because we are delving into the depths of the sea, and made a decision about Israel’s gas economy,” Netanyahu said. “I think we found the correct balance. We were not swept away on the waves of populism that are washing over the country, the world, and we did the correct thing for the State of Israel.”

It is now crucial “to move quickly” and resist succumbing “to populist pressures or endless bureaucracy,” as “without gas exports, there will be no local gas economy,” the prime minister asserted.

According to Netanyahu, if entrepreneurs do not have access to a stable and certain export market, they will not be encouraged to continue with explorations, and the gas will just be “buried under the sea.”

“I think that the ability to withstand the populist wave, against people who do not understand how to run an economy, who can easily destroy economies, this ability is within this government,” he said. “We are united and we have considerable strength and determination to enact this important move.”

For his part, Shalom emphasized that Sunday’s decision demonstrates the government’s desire to make civilian issues a top priority. The flow of gas, he explained, will cause prices of electricity, water and other products to drop and thereby reduce the cost of living.

“The decision that was recommended to the government will maintain Israel’s energy independence, take care of preserving gas for future generations and help the Israeli economy in many areas of life,” he said.

Lapid, meanwhile, said that the decision marked “a great day for Israel.”

“We increased the expanse of the gas for local needs by 20%, but at the same time, we allowed for export that will bring additional investors, will bring the state $60 billion in the next two decades and will lower the cost of living and lead to economic growth,” he said. “This government is a government that knows how to act and make decisions.”

Many voices from the opposition – and from a wide range of political parties – did not show the same support for the government’s decisiveness.

Labor leader Shelly Yacimovich is leading an effort to submit a petition to the High Court of Justice on Monday against the government’s action. Petition signers in addition to Yacimovich include Economic Affairs Committee chairman MK Avishay Braverman (Labor), MK Moshe Gafni (United Torah Judaism) and MK Reuven Rivlin (Likud Beytenu).

“Despite the enormous importance of the decision and despite the obligation to anchor it in the legislative framework of the Knesset, the Israeli government refrained from taking the requested democratic side and decided to avoid bringing the subject for a democratic, transparent and comprehensive discussion in the Knesset,” the petition reads.

Within the petition is an appendix from Deputy Attorney- General Avi Licht that explains that the government’s proposal demands the explicit authorization of the Knesset due to its significant scope and consequent necessity for public debate.

“The volume of gas to be exported and all of the arrangements related to the issue of natural gas carry a huge impact on future generations and significant implications on the economic and social state of Israel for the coming decades,” Rivlin said.

“Therefore, the Knesset, as a sovereign representative, must hold a fitting and obligatory public discussion and decide on this.”

MK Eitan Cabel (Labor) specifically slammed Netanyahu for the government’s decision, stressing that if the prime minister was so sure of his position, he would not be afraid of transferring the discussion to a public Knesset debate.

The organizations Adam Teva V’Din (Israel Union for Environmental Defense) and the Movement for Quality Government are likewise preparing a petition to file to the High Court of Justice in the coming days in light of the decision. These groups are also calling for the decision to occur within the bounds of the Knesset.

“Instead of acting as is required from an environmental, legal and moral perspective and moving this to a transparent discussion in the Knesset, Netanyahu chose to perform a lottery in export numbers to determine a number according to fate and bet on the future of our children,” said Adam Teva V’Din executive director Amit Bracha.

Environmental Protection Minister Amir Peretz (Hatnua) said that while he supports export to some extent, the country needs to allocate a minimum of 600 billion cubic meters to domestic uses, according to ministry calculations.

Peretz also stressed the criticality of ensuring that gas exported to the Palestinian Authority or to Jordan is counted as part of the export allocation and not as part of the domestic reserves.

“I am in favor of exporting gas to bordering countries, which would facilitate the improvement of relations with them, but we must do so from the amount specified for export, and not from the amount that was determined for the local market – which is not really enough for our needs,” said Peretz.

“The cap that has been assigned to the domestic market today does not allow for the efficient transition of the transport sector to gas usage, the most polluting sector today,” he added. “The Knesset debate is not just a question of authority, but also public legitimacy that needs to be taken into account in decisions of this kind.”

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